The Energy Minister is confident the Great South Basin will produce dividends in the future despite two major oil companies quitting their search for oil and gas in the area.
Todd Energy and ExxonMobil have decided the basin off Southland has too high a technical risk, made worse by the remote location and harsh operating environment.
Gerry Brownlee says he does not believe the move by the joint venture to give up its permit is the end of oil exploration in the basin and other companies will now be able to consider exploring the area.
Mr Brownlee rejects claims by some analysts that the move indicates there is not enough gas there to make extraction viable.
Venture Southland's manager for enterprise and strategic projects, Steve Canny, says another company, OMV Ltd, is also exploring the area.